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Wednesday, 13 January 2016

Algos for Hybrid Trading

For me, the optimum way to trade is hybrid trading: a mixture of algo and manual.

What this means is that I have an algo that I can turn on and off, and more. The more is that I have buttons for the different components of all my trading pictures and trade management and I can select which parts of which picture I want to use in a particular context.

I do not believe that its possible to achieve the same profitability with an algo as a proficient discretionary trader. However, with a hybrid algo I can achieve a larger daily consistent profit for less risk than discretionary trading of just one market.

It is not possible for me to program all of the context into an algo and that is why hybrid trading - turning on and configuring the algo for each trade - works best for me. You can see more about this in previous posts and pictures.

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NinjaTrader

Kinetick

About the Electronic Local

I have written this day trading blog since October 2009 when I started teach one of my daughters how to trade. I have recently released an eBook: Trading Order Flow in a Market Profile Context that shows my trading methodology using the latest technology.
I have also been involved in alogrithmic trading since the 1980s when I met both Bob Pardo and David Aronson, two of the most historically influential people in retail algo trading. I taught a course on algo trading a few years ago and have now re-invented how I create and trade algos with the latest technology incorporating order flow.

I have enough money to last me the rest of my life unless i buy something - Rodney Dangerfield

I'm teaching my youngest daughter to trade. She's a 25-year old IT professional who came to me a couple of months ago and said, "Dad, I want to learn to trade. I’m tired of working so hard making other people lots of money. Do you think I can do what you do?".

I've been a successful trader for over 30 years, yet I’ve always discouraged my kids from becoming traders. It's a hard way to make a consistent living unless you have strong discipline and focus. Then I thought, she has a career to fall back on if she doesn’t succeed, which often happens. Plus she was very insistent, (a good trait for a trader) so I said OK.

Was this a weak moment of a dad being wrapped around a daughter's finger?

Will I fail?

Will she fail?

So this blog will be our trading journey and journal. The good, bad and everything in between.

I'll start by posting a huge amount of trading and background information. So if you're following this blog start with the oldest posts.

As things get moving, I'll be adding questions, answers and comments. Twitter will provide Tweets of trading information and I'll even try videos to get the difficult trading concepts and ideas across.

We should end up with an all in one reference and "how to" of my trading methodology.

Tom

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Risk Disclosure:

Futures and forex trading contains substantial risk and is not for every investor. An investor couldpotentially lose all or more than the initial investment. Risk capital is money that can be lost withoutjeopardizing ones’ financial security or life style. Only risk capital should be used for trading and onlythose with sufficient risk capital should consider trading. Past performance is not necessarily indicative offuture results.

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Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

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